TDS Credit Timing

In a taxpayer-favourable ruling, the Tribunal decisively clarifies that TDS credit is intrinsically linked to the year in which the corresponding income is taxed, and cannot be denied merely because the deductor deducted tax in a subsequent year.

Rejecting a purely system-driven (Form 26AS-based) approach, the Tribunal emphasizes substantive taxability over procedural mismatch, thereby preventing double taxation and reinforcing the statutory mandate under Section 199 read with Rule 37BA.

This ruling is particularly significant in industries where timing differences between revenue recognition and TDS deduction are common.